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Middle-income Americans might think they're okay with fee-only financial advice. In fact, a recent LIMRA survey found 55 percent of Americans said they would prefer to pay a flat fee for financial advice.

But then they would find out how much that flat fee was. And they would run for the door.

There is a huge disconnect between what fee-based financial advice costs in the real world and what consumers (particularly middle-income consumers) think it should cost.

LIMRA found that only 1 in 5 consumers are willing to pay more than $100 for investment advice. That probably won’t even get them through the first hour of a meeting with an advisor. In the United Kingdom, where a ban on commissions as payment for providing financial advice took effect this year, another study found two-thirds of British investing consumers say financial advice is worth no fee at all, and the remaining respondents vastly underestimated its fair value.

A fee-only or fee-based financial planner might charge clients either an hourly rate (typically $150 to $300), a flat rate or a fee based on a percentage of the client’s total assets under management (typically 1 percent to 2 percent). If a client has $130,000 invested with a fee-only planner and is charged a 1.5 percent fee on the account’s year-end value, it would work out to $1,950 for that year.

This makes me think back to a 2010 LIMRA survey commissioned by NAIFA that asked consumers what they would do if their advisor charged $2,500 up front for an initial analysis of their situation before they invest any money. The result? Just 1 in 10 said they would pay the fee, and 71 percent said they would seek another advisor or go without professional services altogether.

While wealthy clients typically don’t bat an eye at the thousands of dollars in fees that many investment advisors charge, middle-income Americans bat both eyes, then keep them open wide in astonishment, before running for that door. That’s if they ever get in that door in the first place. As most don’t meet the minimum investable assets requirement many advisors have, there is no first appointment.

As LIMRA, LOMA and LL Global President and CEO Robert Kerzner has repeatedly pointed out, regulators worldwide continue to examine fiduciary standards and, in some form or another, have moved to ban commission-based advisors in several countries including the U.K., Australia, Norway, Finland and the Netherlands. He has predicted these changes could have a devastating effect on consumers’ ability to get the advice they need to protect their family’s financial security and retirement preparation.

Middle-income consumers are in danger of being disproportionately impacted by any potential ban on commissions that may develop under new fiduciary standards currently being considered by either the Securities and Exchange Commission or the Department of Labor. If advisors’ liability and compliance costs increase, many will not find it viable to work with the middle-income clients that need their help the most.

The hope is that any fiduciary rule imposed on advisors will not drive up costs in a way that will end up depriving middle-income consumers of the investment advice and products that protect their family’s security and retirement.